OECD Tourism Trends and Policies

Building on the work of the OECD Tourism Committee, within the OECD Centre for Entrepreneurship, SMEs and Local Development, this periodic report is an international reference and benchmark on how effectively countries are supporting competitiveness, innovation and growth in tourism, through thematic chapters and 51 country-specific policy and statistical profiles.

The tourism sector, a vital driver of job-creation and growth, is under pressure. Facing an increasingly competitive landscape, tourism in many OECD countries has started to lag, in both growth rate and productivity. This book defines the major trends and challenges facing tourism in the next decade – from globalisation to environmental issues. To address these challenges, the book then provides specific policy guidance and recommendations for making tourism more competitive and environmentally sustainable. Tourism data from 42 countries are presented and analysed including all OECD countries, and fast-growing tourism centres such as Brazil, Chile, China and India.

This second review of tourism trends and policies, carried out by the OECD Tourism Committee, assesses the long-term evolution of tourism in the OECD area over the last two decades, the impact of the global financial and economic crisis on the tourism industry and also, for the first time, analyses data and policy trends in twelve non-OECD countries, including big emerging economies such as Brazil, China and India.

Over recent decades, travel and tourism have been large contributors to the world economy. International tourism has been growing at a slightly faster pace than the world economy and this seems likely to continue in the long-term despite the current recession. While its economic importance varies widely, in many of the 42 countries covered in this report, it is clear that tourism plays a crucial role in supporting economic growth and development, in sustaining employment and in generating foreign currency receipts. In the OECD area, for example, the employment growth rate in the hotel and restaurant industry exceeded 2% per year between 2000 and 2007, more than a percentage point ahead of the total employment growth rate (Chapters 1 and 4).

Over the last 20 years, tourism has made a significant contribution to world growth. International tourism has been the fastest-growing component of tourism, although for many OECD countries it remains less important than domestic tourism. Tourism has been variably impacted by the financial and economic crisis that hit the world economy in 2008 and 2009. International tourism has been affected more than domestic tourism and business tourism more than leisure tourism. Over the last two decades, competition on tourism markets has sharpened with the emergence of new destinations. In this context, the results from OECD countries are impressive. OECD countries continue to play a predominant role in international tourism both for outbound and inbound flows. Tourism enterprises have contributed greatly to the overall employment increase in the OECD. Demand trends have been changing tourism, in particular, there is a tendency towards more frequent trips during the year, coupled with shorter individual stays.

Addressing the major and multi-faceted challenges faced by the tourism industry demands an integrated approach to policy development across many government departments. Coherence and consistency are essential in the design and application of policies between all levels of government to ensure that tourism policies are effective. This understanding has led to an increased emphasis on a "whole of government" commitment as outlined in the Riva del Garda Action Statement for Enhancing Competitiveness and Sustainability in Tourism. It has been shown that the development of a tourism strategy can play a key role in engaging government, industry, destination communities and other stakeholders to identify a vision and direction for tourism development and in setting priorities for implementing a long-term and sustainable vision for the tourism sector. Tourism strategies are increasingly emphasising public-private sector co-operation. This chapter offers a range of pointers to those areas in which public policy interventions can be most effective.

The Tourism Satellite Account: Recommended Methodological Framework (TSA) is the main internationally recognised standard to measure tourism in the economy. An increasing number of countries, notably within the OECD area, are implementing the TSA. The benefits of the TSA are wide-ranging: quality benchmark, assessment of tourism contribution in the economy, extensions, e.g. indirect impacts, employment, quarterly and regional data. To a large extent, however, TSA data remain underused. Some key issues limit the usage of the TSA, such as the lack of knowledge about the account, the timeliness, the lack of spatial dimension or the insufficient international comparability. This chapter recommends increasing international efforts in the following areas: i) implementation of internationally recommended standards; ii) involvement of more stakeholders in the production and dissemination of TSA data and extensions; iii) adjustment and better communication of TSA products to users; and iv) building the capacity of TSA users. The OECD, one of the main developers of the TSA, is fully committed to support these efforts.

The following chapter presents summary details of the tourism sector in 42 countries – 30 of which are OECD members. Twelve non-members are included in this chapter. These are Brazil, Chile, China, Egypt, Estonia, India, Indonesia, Israel, Romania, the Russian Federation, Slovenia and South Africa.

In 2007-08, tourism generated about AUD 40.6 billion (approximately 3.6% of Australia’s total GDP), an increase of 4.4% on the previous year. However, since the Australian economy as a whole grew at a faster rate, tourism’s share of GDP fell 0.1% between 2006-07 and 2007-08. In 2007-08, tourism industry employment was estimated to be 497 800 people; approximately 4.7% of total employment.

According to the Tourism Satellite Account (TSA), the direct and indirect value-added effects of tourism in 2008 amounted to EUR 23.6 billion (8.4% of GDP). In 2008, 181 000 people (2007: 169 000) were employed in the accommodation and restaurant industry, i.e. 5.3% of the total number of employees in Austria, of which around 60% are female (Source: Austrian Social Security Institutions).

Tourism (domestic and international) contributes 2% to Canada’s GDP and accounts for 3.8% of national employment. The sector’s contribution in both these measures has remained broadly stable over the past five years. Tourism generated 662 900 jobs in 2008, an increase of 1.4% over 2007.

The share of tourism in the Czech Republic’s GDP, calculated by the Tourism Satellite Account (TSA) method, was 2.9% in 2007. The number of international arrivals reached 6.6 million in 2008. Domestic tourism consumption amounted to EUR 3 804 million in 2007.

Tourism accounts for 1.9% of Danish Gross Value Added (direct effect) and for 3.9% of total employment (indirect and induced effects) in 2006. Total tourism consumption in Denmark is DKK 72 billion, equivalent to 1.9% of total consumption.

Tourism in France accounts for 6.3% of gross domestic product and generates 1.8 million jobs (direct and indirect). France, which has been the top-ranking international destination in terms of volume for the past 15 years, now faces a new international environment in which global growth is driven by flows outside Europe and competitive new products are emerging.

Tourism is an important sector of the German economy and contributes to both growth and employment. Around 2.8 million jobs depend directly and indirectly on the tourism sector, which also provides approximately 114 000 training places (2008).

According to recent assessments the contribution of tourism (direct and indirect impact) to the Greek economy represents 18% of GDP. The "hotels and restaurants" sector represents half of tourism activities and directly contributes 6.6% to GDP (2007). In 2008, the average tourist expenditure per capita was EUR 730, while in 2007 it was EUR 700. Moreover, the tourism sector creates approximately 700 000 jobs and also plays a decisive role in the development of the regions.

Tourism contributes an estimated 5.3% of GDP (2006) and in that year the industry employed 355 000 people, 9.2% of the workforce. Foreign currency receipts from tourism totalled HUF 4.1 billion in 2008 showing an increase of 18.9%.

International tourism in Iceland is one of the major contributors to the economy, accounting for 6.2% of GDP in 2004 and reaching 7.5% in 2008. The sector also accounted for 16.9% of export earnings in 2008. International tourist receipts were ISK 51 290 million in 2008. Growth has been erratic since 2004, with arrivals increasing by 39.3% in the five years to 2008 and international tourism receipts by 96.6%.

In the context of the exceptionally challenging conditions affecting nearly all of Ireland’s main markets, overall visitor numbers held up quite well in 2008. According to figures published by the Central Statistics Office, there were 8.0 million overseas visitors to Ireland in 2008, a slight fall of 3.7% on the record performance in 2007. These visitors generated an estimated EUR 4.8 billion in service exports. Together with a projected EUR 1.5 billion generated by tourism spending by Irish residents (which grew strongly in recent years as the domestic economy and household incomes grew), Irish tourism is estimated to be worth at least EUR 6.3 billion in 2008 (equivalent to 4.1% of GNP). In employment terms, it is estimated that in 2008, the Irish tourism and hospitality industry sustained close to 250 000 jobs.

In 2007 tourism contributed 4.8% of Italian GDP, and domestic tourism accounted for 7% of final consumption in the country. Some 9.7% of Italians workers are employed in the tourism industry which employed 1.246 million people in 2008 (3rd quarter), according to national figures. This represents a small fall in total tourism sector employment on 2007 (of 1.6%), although it was 11.9% greater than the total in 2004.

Tourism is one of the major sectors in the country’s economy. During fiscal year 2007, it is estimated that JPY 23.5 trillion, including JPY 1.5 trillion spent by visitors to Japan from overseas, were spent on travel in Japan. The Japanese spent JPY 4.3 trillion on travel overseas, and it is estimated that they spent a total of JPY 26.4 trillion (excluding JPY 1.5 trillion spent by visitors to Japan from overseas) on travel during the year.

The total number of foreign inbound tourists in 2008 was 6.89 million, an increase of 6.9% compared to the previous year. The number of outbound tourists was 12.0 million, a decrease of 10%. The decrease is believed to be due to the economic recession and a high exchange rate, which led to an overall decrease in international travel. Of the total foreign inbound tourists in 2008, travellers from Japan comprised the highest percentage at 34.5%, followed by those from China at 16.6%, from the US at 8.9%, and from Taiwan at 4.6%.

According to the Tourism Satellite Account (TSA) for 2006 (the latest year for which data are available), tourism accounted for 8.2% of GNP and employed 2 420 000 people, 6.7% of total employment. In that same year, the share of domestic tourism consumption in final consumption in the economy was 18%, with a gross value added of USD 74 263 million.

The tourism industry in the Netherlands is as other countries heavily dependent on the economy in general. As a result of the recession the first signs of decline in the tourism sector appeared in 2008 in line with worldwide trends. In contrast to 2007 inbound tourism in the Netherlands declined in 2008 with 0.9 million tourists. In 2008, the four leading visiting countries were the United Kingdom, Germany, Belgium and France. Together they accounted still for 6.0 million or 60% of the total.

International tourism makes a major contribution to the New Zealand economy, contributing 16.4% of New Zealand’s total export earnings. International tourism receipts reached NZD 9.3 billion in the year-ended March 2009 and is forecast to increase by 4.7% per year to 2015, with international visitor arrivals rising by 2.5% per year. Tourism growth has implications for the physical infrastructure, investment intentions and the skills and talents required of the workforce. All of these need to be of sufficient quality and quantity to support the sector, particularly in peak periods.

Tourism accounted for 3.2% of GDP and 6.2% of total employment in 2008. Compared to the previous year (2007), tourism employment in 2008 grew by 2.1% from 135 200 to 138 000 full-time equivalent persons (employees and self-employed).

The share of tourism in GDP in 2008 was 6%. The expenditure of foreigners in Poland in 2008 was estimated at PLN 28.1 billion, while that of Polish residents in Poland was estimated at PLN 23.9 billion. The expenditure of Polish residents abroad was PLN 22.5 billion. The total value of the tourism economy was estimated at PLN 76.1 billion. In 2008 tourism exports were PLN 23.5 billion, 4.7% of total Polish exports.

According to the Portuguese Tourism Satellite Account (TSA), tourism consumption contributed 10.5% to GDP in 2008 (it represented 10.5% in 2007 and 9.7% in 2006). The TSA estimates that employment in tourism-characteristic industries/activities represented around 8% of total employment in 2007.

In both 2007 and 2008, tourism accounted for 2.7% of GDP and contributed 28.7% of the country’s export revenue, a level that has remained steady over recent years. The tourism sector in 2005-07 employed just over 4% of the workforce.

Tourism is one of the mainstays of the Spanish economy. It accounts for around 11% of GDP and 13% of employment, and contributes substantially to offsetting the trade deficit. With 97.8 million foreign visitors (57.3 million tourists and 40.5 million same day visitors) in 2008 (1.1% fewer than in 2007) and tourism receipts of close to EUR 41.9 billion (0.4% less than in 2007), Spain has consolidated its position as the second-largest destination in terms of tourist arrivals and receipts. Over 2.6 million people work in Spain’s tourism sector, the majority (55.3%) in the hotels and restaurants sector.

The Swedish tourism industry contributes about 3% to Swedish GDP. Growth over the years has had a positive impact on employment and new enterprises, especially in sparsely populated areas. The recent global slowdown of the economy has, of course, had a certain impact on the Swedish tourism economy, but not very dramatically. The main reason for this is that in times of crisis in the economy, more Swedish tourists tend to stay at home or close to home, thus keeping the domestic tourism business at a relatively high level. In 2008, domestic tourist nights numbered 38 million, up 0.7% on 2007, although outbound trips also rose by 4.7%, to 13.3 million.

Travel and tourism rank among the most dynamic of Switzerland’s economic activities. Tourism is a sector whose importance to the economy is paramount. In 2005, its direct value added comprised 2.9% of GDP, and it accounted for 4.4% of total employment (full-time equivalent).

Tourism is one of the most dynamic and fast-developing sectors in Turkey. The arrivals increased to 26.4 million and tourism receipts increased to USD 21.9 billion in 2008. The number of visitors from the OECD countries and eastern Europe considerably rose and accounted for 56.5% and 29.4%, respectively. Among the countries which sent largest number of tourists to Turkey, Germany ranked first with 16.8%, followed by the Russian Federation with 10.9% and United Kingdom with 8.2%. Some 4.9 million nationals travelled abroad in the same year giving a positive balance on tourism receipts. In 2009, tourist arrivals are estimated at 26.6 million and tourism receipts at USD 21.5 billion.

Tourism in the United Kingdom is worth around GBP 86 billion (in 2007), 2.7% of UK gross value added (down from 3.0% in 2005). Tourism directly supports over 1.4 million jobs and indirectly supports around 2.7 million jobs. It is the fifth largest industry in the United Kingdom. The sector comprises around 289 000 businesses.

The travel and tourism industries of the United States are major contributors to GDP, accounting for 2.6% of value-added to the US economy in 2006. In a USD 14 trillion economy, travel and tourism are of paramount importance. Travel and tourism-related exports now account for 26% of all US services exports and 8% of total US exports of all goods and services.

In line with international recommendations, the National Tourism Board, SERNATUR, has constructed a Tourism Satellite Account (TSA) for the years 2003 to 2006.

International tourist arrivals totalled 2 710 000 in 2008, an increase of 45.1% on 2004, representing an annual average rate of growth of 9.7%. Income from tourism (foreign exchange receipts) reached USD 1 617 million in 2008. The top five origin markets for visits to Chile in 2008 were Argentina, Bolivia, Peru, Brazil and the United States. Together these five countries contributed 70.3% of all international arrivals in the year.

Tourism is an important industry in the national economy and plays an important role in expanding domestic demand and in promoting economic growth. Tourism consumption has taken a significant position in the total demand especially in residents’ consumption. In 2007, the tourism industry was about 1.3% of gross domestic product and the share of tourism expenditure in exports of goods was 3.4% and the share of tourism expenditure in exports of services was 33.7%.

The past five years witnessed a fundamental change in Egypt’s economic policies following the appointment of a reform-minded economic team in July 2004. Since then, the government of Egypt adopted a series of financial and tax reforms, monetary policy adjustments, broadening the private sector’s contribution to economic activities by activating asset management programmes and simplifying investment procedures. In line with the overall positive economic performance, the tourism sector has also regained the same momentum and realised outstanding achievements in terms of volume, value added and foreign revenues.

In 2008, total receipts from inbound tourism (travel receipts and fare receipts) amounted to EUR 1.1 billion (EEK 17.6 billion), 9.1% more than in 2007. Tourism receipts accounted for 9.3% of Estonia’s total exports of goods and services and 31.9% of the exports of services.

According to the Tourism Satellite Account (TSA) of India for the year 2002-03, the contribution (both direct and indirect) of tourism in the GDP of the country was 5.8%, and its contribution to total employment was 8.3%. As the tourism sector has continuously witnessed high growth from 2002 to 2008, these shares are expected to have increased. The number of foreign tourist arrivals in India is estimated to have reached 5.37 million in 2008, having risen from 2.73 million in 2003, registering a compound annual average growth rate of 14.5%. Foreign exchange earnings from tourism rose from USD 4.46 billion in 2003 to about USD 11.7 billion in 2008, a compound annual average growth rate of 21.3%.

Tourism contributes some 2% to national GDP and just over 3% of total employment counting only direct tourism jobs. In 2007, the combined total of direct and indirect tourism jobs was some 140 000, 5% of total employees.

Based on the indicators calculated by the Institute for Research and Development in Tourism (INCDT) according to Oxford Economics Methodology, the share of direct tourism industry in total GDP rose steadily until 2006. In 2007 it fell slightly, but regained some of the ground lost in 2008 when tourism accounted for 2.3% of GDP (2.2% in 2007).

According to the Tourism Satellite Account methodology, tourism contributed 5% of GDP in 2003 and 5.5% of GDP in 2006 (by extrapolation). Data for 2008 show that total international tourist arrivals reached 1.77 million and total international tourist overnight stays reached 4.8 million. In terms of international overnight stays, in 2008 the largest market for Slovenia was Italy with 906 369 (18.7%), followed by Austria with 613 765 (12.7%) and Germany with 585 054 (12%). Other important tourist markets are: Croatia (6%), the United Kingdom (5.8%) the Netherlands (4.8%) and the Russian Federation (3.3%).

In 2008, almost 9.6 million foreign nationals visited South Africa, an increase of 5.5% on 2007 and well above the global increase in international arrivals of 1.1% for that year. Thus tourism in South Africa has shown itself to be relatively resilient to the global economic crisis in that year.